Rounding Tops and Bottoms

Rounding Tops and Bottoms
Rounding tops occur as expectations gradually shift from bullish to bearish. The gradual, yet steady shift forms a rounded top. Rounding bottoms occur as expectations gradually shift from bearish to bullish.

Head-and-shoulders patterns, rounding tops and bottoms, ascending and descending triangles, and double and triple tops are proven patterns that many currency prices will follow. Hence, they have strong predictive powers.

Another common pattern is the "Rounding Tops and Bottoms" which occur as expections invert (i.e. from bullish to bearish or vice versa). Price pattern form a smoother "bowl shaped" effect, in other words a gentle reversal is taking place.

See also: Market, Support, Resistance, Trends, Resistance level